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| EX-99.2 - PRESS RELEASE OF ZOOM TELEPHONICS, INC., DATED MAY 11, 2020, ANNOUNCING CEO TRAN - MINIM, INC. | zmtp_ex992.htm |
| 8-K - CURRENT REPORT - MINIM, INC. | zmtp_8k.htm |
Exhibit 99.1
Zoom
Telephonics Reports Record Sales of $12 Million for Q1
2020;
Up 49.3% From Prior Year Quarter
Boston, MA, May 11, 2020 – Zoom Telephonics, Inc.
(“Zoom”) (OTCQB: ZMTP), a leading creator of cable
modems and other Internet access products, reported financial
results for its 2020 first quarter ended March 31,
2020.
First Quarter 2020 Financial Highlights
●
Net
sales were $12 million, up 49% year over year
●
Gross
profit was $3.1 million, up 28% year over year
●
Gross
profit margin was 25.9%, down from 30.2% in prior year first
quarter
●
GAAP
net loss was $0.8 million, a 33% improvement year over
year
●
Non-GAAP
net income was $0.7 million after adjusting for tariff expenses of
$1.5 million
First Quarter 2020 Business Overview
Overall, the company produced record sales of $12 million during
the quarter, despite the significant economic disruptions resulting
from the Covid-19 pandemic. This level of sales has not been seen
in over a decade. Consumer demand for networking products was
strong throughout the quarter, supported by substantial online
shipping activity. Zoom was able to ensure continuity of supply
through Covid-19 disruptions experienced in Asia as early as
January 2020, and supply chain conditions can be characterized as
“returning to normal” at present.
The company expects to have completed the shifting of its
manufacturing operations to other locations by the end of the
second quarter, with the tariff expense declining to near zero by
early in the third quarter. After the quarter end, Zoom announced
the extension and expansion of its Motorola license. In addition to
the inclusion of new product families, the license agreement now
runs through 2025.
Zoom’s 2020 plan centers on an aggressive new product rollout
schedule that remains very much on track. The proliferation of
video-based communication services, due in part to so many people
working from home, is driving an increased emphasis on optimizing
home networks. The company is experiencing strong demand for its
already popular gateway products, which are available through
online shopping and brick and mortar platforms such as Amazon and
BestBuy.
As previously reported, the company has convened a search committee
to identify a CEO following the resignation of Joe
Wytanis.
First Quarter 2020 Financial Review
Zoom reported an increase in net sales of 49.3% to $12.0 million
for the first quarter ended March 31, 2020 up from $8.0 million for
the first quarter ended March 31, 2019. The increase in sales
resulted from robust demand in its ecommerce and retail
channels.
Gross profit was $3.1 million or 25.9% of net sales in the first
quarter of 2020, compared to $2.4 million or 30.2% of net sales for
the first quarter of 2019. Tariff expenses increased cost of goods
by $1.5 million in the first quarter of 2020, compared to $445
thousand in the first quarter of 2019. Excluding tariff expense,
gross profit margin in the first quarter of 2020 would have been
38.4%. The company also experienced one-time increased supply-chain
fulfillment costs brought on by Covid-19 disruptions in order to
assure the ability to satisfy customer demand.
Operating expenses were $3.8 million, compared to $3.5 million in
the year-ago quarter. The increase versus the prior year was
primarily due to increased General and Administrative expenses
incurred in support of Zoom’s product rollout and growth
strategy.
The company ended the quarter with $5.0 million of working capital
and a current ratio of 1.83x. Zoom had drawn $387 thousand on a
$3.0 million line of credit; with no long-term debt; and $5.7
million of stockholders’ equity.
Conference Call Details
The conference call for this quarter, which was previously
scheduled for Tuesday, May 12, 2020 – 10:00 a.m. ET, has been
cancelled. The company intends to issue its first quarter 2020
earnings in its Form 10-Q quarterly report, as planned on May 15,
2020.
About Zoom Telephonics
Zoom Telephonics, Inc. (“Zoom”) (OTCQB: ZMTP) is the
creator of innovative Internet access products that dependably
connect people to the information they need and the people they
love. Founded in 1977 in Boston, MA, the company now delivers cable
modems, routers, and other communications products under the
globally recognized Motorola brand. For more information about Zoom
and its products, please visit www.zoom.net and
www.motorolanetwork.com.
MOTOROLA and the Stylized M Logo are trademarks or registered
trademarks of Motorola Trademark Holdings, LLC and are used under
license.
Forward Looking Statements
This release contains forward-looking information relating to
Zoom’s plans, expectations, and intentions. Actual results
may be materially different from expectations as a result of known
and unknown risks, including: the potential increase in tariffs on
the Company's imports; potential difficulties and supply
interruptions from moving the manufacturing of most of the
Company’s products to Vietnam; potential changes in NAFTA;
the potential need for additional funding which Zoom may be unable
to obtain; declining demand for certain of Zoom’s products;
delays, unanticipated costs, interruptions or other uncertainties
associated with Zoom’s production and shipping; Zoom’s
reliance on several key outsourcing partners; uncertainty of key
customers’ plans and orders; risks relating to product
certifications; Zoom’s dependence on key employees;
uncertainty of new product development, including certification and
overall project delays, budget overruns, and the risk that newly
introduced products may contain undetected errors or defects or
otherwise not perform as anticipated; costs and senior management
distractions due to patent-related matters; and other risks set
forth in Zoom’s filings with the Securities and Exchange
Commission. Zoom cautions readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the
date made. Zoom expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any such statements
to reflect any change in Zoom’s expectations or any change in
events, conditions or circumstance on which any such statement is
based.
Investor Relations Contact:
Jeremy Hellman, Vice-President
The Equity Group Inc.
Phone: 212-836-9626
Email: jhellman@equityny.com
ZOOM TELEPHONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share
data)
|
|
Three Months Ended
|
|
|
|
3/31/20
|
3/31/19
|
|
|
|
|
|
Net sales
|
$11,955
|
$8,010
|
|
Cost of goods sold
|
8,860
|
5,591
|
|
|
|
|
|
Gross
profit
|
3,095
|
2,419
|
|
|
|
|
|
Operating expenses:
|
|
|
|
Selling
|
2,354
|
2,448
|
|
General
and administrative
|
828
|
568
|
|
Research
and development
|
653
|
482
|
|
Total
operating expenses
|
3,835
|
3,498
|
|
|
|
|
|
Operating
profit (loss)
|
(740)
|
(1,079)
|
|
|
|
|
|
Other income (expense), net
|
(6)
|
(34)
|
|
|
|
|
|
Income
(loss) before income taxes
|
(746)
|
(1,113)
|
|
|
|
|
|
Income tax expense
|
6
|
8
|
|
|
|
|
|
Net
income (loss)
|
$(752)
|
$(1,121)
|
|
|
|
|
|
Earnings (loss) per share:
|
|
|
|
Basic
and diluted Earnings (loss) per share
|
$(0.04)
|
$(0.07)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding:
|
|
|
|
Basic
and diluted
|
21,080
|
16,138
|
ZOOM TELEPHONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except share data)
|
|
3/31/20
|
12/31/19
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
$28
|
$1,217
|
|
Restricted
Cash
|
550
|
150
|
|
Accounts
receivable, net
|
5,947
|
4,071
|
|
Inventories,
net
|
4,179
|
7,440
|
|
Prepaid
expenses and other
|
237
|
270
|
|
|
|
|
|
Total
current assets
|
10,941
|
13,148
|
|
|
|
|
|
Property and equipment, net
|
281
|
303
|
|
Operating lease right-of-use assets
|
78
|
103
|
|
Other assets
|
345
|
349
|
|
|
|
|
|
Total
assets
|
$11,644
|
$13,903
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
Bank
debt
|
$387
|
$––
|
|
Accounts
payable
|
2,777
|
5,025
|
|
Operating
lease liabilities
|
78
|
103
|
|
Accrued
other expenses
|
2,720
|
2,666
|
|
|
|
|
|
Total
current liabilities
|
5,962
|
7,794
|
|
|
|
|
|
Long-term
operating leases
|
––
|
––
|
|
|
|
|
|
Total
liabilities
|
5,962
|
7,794
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
Common
stock and additional paid-in capital
|
47,030
|
46,706
|
|
Retained
earnings (accumulated deficit)
|
(41,348) )
|
(40,597)
|
|
|
|
|
|
Total
stockholders’ equity
|
5,682
|
6,109
|
|
|
|
|
|
Total
liabilities and stockholders’ equity
|
$11,644
|
$13,903
|